A methodology for strategy-oriented project portfolio selection taking dynamic synergy into considerations

Abstract

The selection of an optimal project portfolio from multiple project proposals to implement management strategy is always a challenge task for project managers, especially, in the selection of large-scale and complicated projects. This is particular true because project portfolio selection decisions have to be made based on complicated evolution, comprehensive strategic criteria and dynamic synergies. This paper presents a proposed methodology of system dynamic model with consideration of dynamic synergies to predict the value of strategic realization through project portfolio implementation. This method can be applied in the project portfolio selection process, which consists of three procedures: project elimination by resource constraints, project functional value determination and system dynamics approach modelling simulation. In this case, dynamic synergy considerations can help to produce more rational selection results while strategy-oriented selection can ensure that the selected project portfolio aligns with a company’s strategy. A case study is used to demonstrate the application of the proposed methodology. The results show that the proposed method can help project managers to select an optimal project portfolio with maximal strategic criteria. The proposed method can be incorporated into expert systems in the organizations to enhance the organizational objective priorities in the decision-making process.

Keywords

• Project portfolio selection
• Strategy
• Dynamic synergy
• System dynamics approach model
• Decision-making process